tv Tavis Smiley WHUT June 18, 2010 10:00pm-10:30pm EDT
tavis: good evening from los angeles, i'm tavis smiley. as congress gets closer to passing some kind of financial reform legislation, first up tonight a conversation with one of the people at the center of the financial reform debate, phil angelides, the former california state treasure is now the chair of the financial crisis commission which was created to examine the cause of the financial meltdown. also tonight a conversation with an acclaimed first-time novelist named brando skyhorse. the l.a. native just made about every list of notable book for the summer. his novel, "the madonnas of echo park." we're glad you've joined us. financial inquiry position chair phil angelides and novelist brando skyhorse coming up right now. >> all i know is his name is james and he needs extra help with his reading. >> james? >> yes. >> to everyone making a difference. >> thank you.
>> you help us all live better. >> nationwide insurance proudly supports "tavis smiley." tavis and nationwide insurance. working to improve financial lit asy and the economic empowerment that comes with it. >> ♪ nationwide is on your side ♪ >> and by contributions to your pbs station from viewers like you. thank you. [captioning made possible by kcet public television] tavis: phil angelides is th former state treasure in california who heads up the 10-member financial crisis inquiry commission. the findings of his group are due to the president and congress in december of this year. phil angelides, good to have you back home for a few days. >> good to be with you. >> tavis: you've been in d.c. a
flights. tavis: you and i were talking before the air, and we'll get the details in second by i was asking about the media's coverage, everyone wanted to talk about the meltdown. when the commission was named, between the two of us, phil is a great guy but he ain't going to get traction on this, nobody is going to come forth and tell the truth, the media ain't going to cover this because it ain't sexy in their hearings but to my surprise, my assessment, i want to hear yours. i've seen a lot of coverage of the hearings. >> first of all, you're right. there's a fascination about the meltdown itself, but the real story is how as a country do we get to the point where our financial system almost collapsed and the only supposedly rational choe was to put trillions of taxpayer money in to support the system. here's why i think there's still a lot of interest in this issue. there's 27 million people out of work, can't find full-time work, stop looking for it. two million families have lost their homes, another two
million families are in foreclosure, another two million are behind on their mortgages. people have lost much oftheir lifesavings and people want to know what happened. how did it come to be the wealthiest economy in the world had this kind of boom and the spectacular bust. they want to know who, why this happened. tavis: i want to talk details in a second but to your point about everyday people wanting to know who, what, why, when and where reminds me of that old adage that old politics -- tip o'neill, all politick is local. you were the treasure of this state and ran for governor of the state. you know the state well. california is a number of states but california specifically just recently missed its second constitutional deadline to balance a budget. how is all this fallout on wall street impacting states, local people? >> first of all, it's interesting. you know, this is almost like there was an earthquake and the only buildings left standing were the gleaming skyscrapers
at the center. there's rubble all over this country, high unemployment, state and local governments devastated, in substantial debt. i will say a lot of it is the fallout. here in california there's also culpability because the state borrowed heavily and lived beyond its means when times were good and in some ways the state story is the same story to what happened to a lot of financial institutions on wall street. they borrowed heavily and were reckless in the good times and when the bump came they fell particularly hard. there's no question that the financial crisis has now morphed into an economic crisis that is likely to be with us for years and years and years. toich i want to give you a -- tavis: i want to give you a blank slate and ask a generic question about design, what are you learning and what have you learn sod far about what happened? >> i've learned a lot. our commission is like a jury, we're to hear all the facts, all the evidence, hear the whole case before rendering a judgment. let me give you a few things i've been struck about. first of all, i was someone who
was in real estate and investment most of my life and was treasure in the state of california so i'm not unfamiliar with the financial system. i have been struck by the extent to which our financial system went from one that supplied capital to build businesses and create jobs and build our economy to one that became a huge casino. it's as if i walked into the community bank and opened a door and then saw a casino as big as new york, new york. take the housing finance area. the system was a 20% down payment mortgage, the lender would sell those mortgages to investors and obviously what happened was something very different, mortgages being made that were negative amortization, low teaser rates being made to people who never should have had those mortgages. they were then packaged, sold to investors, repackaged, it became an extraordinary betting parlor. enormous leverage. companies on wall street leveraged 40-1 which means almost no equity. the minute we had a bump they would come tumbling down. struck by the huge risk and
gambles being taken without regard to its consequence for the economy. i think i'm also struck by in the wake of this disaster, how few people in power, public and private corporations have suffered any consequence, c.e.o.'s made tens of millions of dollars. they're still there. hundreds of millions of dollars. public leaders who failed to see all the warning lights, still in positions of control. the real consequences of this has not been felt in wall street or in washington. it's been felt around the country. and i think the final thing i would say is i've been struck by the extent to which everyone points fingers away. take alan greenspan. headed the federal reserve who was the one agency that could have regulated subprime lending and despite all the flashing red lights, the f.b.i. warning that mortgage fraud was an epidemic in this country, the clear evidence that there was predator lending going on, the federal reserve did
nothing. they sat on their hands. greenspan then said we referred things to justice and in seven years, two cases to the department of justice for unfair lending. so look, it's easy to look back and say, well, you should have caught all these warning signs but as a society, if we ignore all the warning signs that are out there about abusive lending practices, mortgage fraud, rampant speculation, and we don't soak those in, we're doomed to repeat this crisis again. tavis: to your point of greenspan, it's a long list and can talk about robert rubin and these guys coming forth. >> by the way, this is without regard to party. tavis: exactly. the question is a two-part question. your take on the accepting of responsibility by the persons who you know were involved in this, assess that for me and assess for me the stonewalling that you got in certain places. >> ok. so first of all, the commission actually has done about 800 interviews today, before it's
over we'll do 1,200, 1,300, we'll have a remarkable oral history for this disaster for people to learn from. we've reviewed millions of pages of documents so there will be a real body here of what happened. and we found a lot of people have been forthcoming but a lot of the leaders have not been. take alan greenspan. he said in the end he was in charge of monetary policy, he could have regulated subprime lending. in the end of the day he said he was 70% right and 30% wrong. the captain of the titanic was 99% right and 1% wrong. it's the size of the mistake. take bob rubin, you know, he served our country i think all these people are honorable people in many respects but at city group, he was paid -- citigroup, he was paid guaranteed $15 million a year, an enormous sum of money. when citigroup collapse required a $45 billion bailout from the u.s. government, $300 billion in guarantees by the taxpayers, robert rubin's position was i had no
operational control. the reason responsibility is important is not so we can pillarry people but unless people are willing to admit mistakes, take responsibility, i don't think we'll ever get the self-examination we need to have true reform. tavis: isn't it funny how washington works. >> that's not how wall street is working right now. because what happened in the wake of the crash of 1929, businesses dissolved. i mean, there was real consequence. but wall street was spared consequence by the infusion of trillions of dollars of taxpayer money. so we're going to have to work particularly hard as a country to do the self-examination or we'll get back to the same old business and i think that's where wall street would like to go, things were good, they were turning out money quickly. one last thing, take the credit rating agencies. their job was to rate securities for investors. moodies -- moody's in 2007 rated nearly $900 billion in mortgage securities, 80% of
those had to be downgraded. they got it completely wrong. but there's been no changes to the credit rating model. they were a triple-a factory. they were churning out triple-a ratings that investors relied on, and despite all the warning signs the housing market was crashing, all they wanted to do was keep making their fees and turning out their ratings. there needs to be a coming to grips with the magnitude of what's happened here. tavis: speaking of coming to terms with it, coming to grips with it, there is going to be, we suspect, in some shape, form or fashion, a financial reform package the president wants on his desk by july 4. how is it we can reform the financial sector before the report comes out in december that details all the stuff that went wrong? is that a little backwards? >> it's a little backwards. but we were given a hand and we're going to play the hand we were dealt. i'm not going to tell people who elected people in congress or the president to sit around on their hands. based on what they know they ought to be moving ahead.
but i think the reform movement is just starting, not ending. we've learned more about practices on wall street this year, goldman sachs selling securities and betting against them. a whole set of other practices that have come out at the rating agencies. i think a lot more has got to be learned in the years ahead and reform doesn't just happen with a sweep of a pen. it requires regulators who have political will. you know, we had regulators before, we had an s.e.c. and a federal reserve. they chose not to constrain reckless behavior. it will take regulators, political will, resources, capability, a new ethical compass on wall street. so i think we're starting down the road in the 1930's, the new deal took a decade. tavis: what about the notion that we hear it's advancing, if ever so slowly, the notion of grating -- creating a consumer protection agency. your thoughts on that? >> sure. consumers ought to be protected and a lot of the products in the marketplace, mortgage products should never have been
out there. they were reckless, they were predatory, the federal reserve in 2009 -- 2001 knew there were real problems. states all over the country were prige trying to fight predatory lending while the federal government was trying to held them back. in 2009 they a-- 2001 they adopted 70% of the predator lending and covered 1%. clearly, regulators and consumer protection did not exist. you had amortization loans, deceptive interest rates. look, we need to make sure our financial system as well as our families aren't subject to those toxic products. tavis: i went back the other day just because i was curious and knew you were coming on, i went back in my research to look at the 9/11 commission and all the recommendations they made and i wanted to get a sense of how many of those recommendations in 2010 have actually been adopted. it's the 9/11 commission and
here we are on 2010 and a new president and the overwhelming majority of those recommendations have never been adopted after 9/11 . tell me why you believe that your recommendations are going to be adopted and is it just enough to lay out an oral history, that's got value to be sure, or does there need to be more here? >> first of all, on 9/11, i think the most important contribution was to tell the big story, that the tragedy could have been avoided and that the country was unprepared. and i do think as a result of that, there's been more thinking in this country about how to be prepared, how to protect our citizens against terrorism. there's a heightened focus and i think the 9/11 commission deserves credit for that. in our instance our charge is to lay out what happened to get to the causes. and my hope is that we'll be part of a deeper self-examination, if we point out huge deficiencies in protecting consumers, reckless gambling in the marketplace, no responsibility by corporate executives, all upside, no downside.
hopefully we can contribute to a deeper dialogue in this country. i'll tell you right now, i believe i along with other commissioners, even after we present our report, we're going to need to stay at this. again, nothing's really changed from the circumstances that existed before the meltdown. that still is yet to be done. tavis: you served honorably as treasure and once ran for governor and now is the man in washington getting to the bottom of what happened in the financial meltdown. he is phil angelides. >> thanks. tavis: next, an acclaimed young novelist in l.a., brando skyhorse. stay with us. tavis: brando skyhorse is a first-time novelist whose book "the madonnas of echo park" has been named one of the best of the summer by "usa today" and for that matter, just about everybody else. the book takes its name from the l.a. neighborhood he grew up in, a neighborhood in fact
just down the road from this studio, brando, welcome back to the neighborhood. >> thank you so much, tavis. happy to be back. tavis: how you been, man? >> i've been good. tavis: i know that this, as i said, is a book that everybody picked for the summer reading list. and so this is your first novel, so it's kind of a coming out party so to speak. >> sure. tavis: and i know and am confident years from now i'll be taking pride in the fact i was able to meet you early on in your career and because i know people will come to know your work over the years, let me start with stuff about you. >> sure. tavis: before we get to know you and get in the actual text. i mentioned you were raised in the echo park valley. tell me about your childhood. >> born in 1973 in echo park and my grandmother owned a house she bought in 1952. from the time i was -- my family had connections there in the early 1950's by the time i left in the 1990's and was there about 50 years and saw an enormous transformation. my grandmother moved when it was a predominantly white italian neighborhood and saw it
transform from white to italian to mexican to vietnamese. i grew up on the cusp of the second changeover from white to italian to mexican and vietnamese. it was an interesting place to kind of be exposed to a lot of different cultures and a lot of different ethnicities. tavis: to your point about ethnicities and cultures, what is your -- >> i'm mexican american. the name skyhorse is a native american name. when i was 3 years old my mexican father abandoned me and my mother started corresponding with a man in jail who was native american and i believed until i was 12 or 13 years old i was literally native american and when i found out i was mexican she encouraged me to keep up the story because she was living her life as a native american and went from maria teresa beniaga to running deer skyhorse. as far as brando is concerned i know it sounds cheesy to say but she was a really big fan of the godfather so it was going to be brando or pacino, pacino
skyhorse, i think she made the right call. tavis: when you found out you were not in fact born native american but mexican, the journey in echo park, the journey in america for that matter of being mexican is what as you see it and the journey being native american is what as you see it? >> those are very distinct journeys. i think my mother felt she would not only get more currency or maybe a better story to tell but in the late 1970's or early to mid 1970's, i'm sure you learn the american indian movement and the mohawk trial in los angeles, i think there was something glamorous and something very dynamic. there was a feeling this was a movement that was going to change things in america, especially for a group of -- an ethnic group that had long since marginalized. i don't think she felt that way with mexican americans which is strange to say but there was the laossa movement and chicano movement and growing up, they does a great job of raising me in.
i went to sweat lodges and met people in the american indian movement involved in trying to get people out of prison and such but as far as latinos and such, it was something she wasn't interested in and something she didn't connect with. tavis: my sense is, and i get a chance to talk to authors on my program and radio show all the time. but my sense is beyond a good story which we'll come to in a second, part of the reason why you're being so celebrated by the industry is because you come out of the industry, it's not often you get someone who writes his or her first book who has worked in publishing for 10 years, tell me about your journey through the publishing world. >> i'd like to say there was a part of that but when you're working in the industry, else i worked as an editor for 10 years and working on other people's writings, when you're dealing with agents and such, they don't want to know from adam if you're writing but if you can buy my client's book and if you can do this or that. i don't want to say it was a huge advantage but i think i knew more about the machinations of the industry so that when my book got ready to be shopped and it came time looking for an agent and such i
was aware of the pitfalls and aware of how long response times take, for instance. i had approached the industry as a neophyte, i'd send something to my agent monday and calling monday afternoon, so you read it, is it going out today, so on and so forth. i think it was helpful for me navigating the pitfalls that a lot of first time writers fall into. tavis: i hear the point about understanding how the process works was beneficial. how does it help to have been an editor of other people's work to your point? >> that's a very astute observation because i think that as an editor, you're asking really skilled writers, and i worked with some of the best nonfiction journalists in the business. you're asking them to make decisions about their own work and this is work they have an enormous amount of connection to. when you make those types of demands, you go back to your own writing and you ask yourself, why am i asking my reader to do this? why am i asking my read tore make this leap for me, so you become more demanding of what you expect not only of your own
work but a reader who interrogates your work as well. tavis: one more question, since you mentioned you worked with so many great writers over the years, and since they all thanked you in the credits anyway, this ain't no secret. >> some of them good. the ones i liked did. tavis: you have had the honor of working with several authors over the years. >> i worked with frank deford who is one of the legends of the business and i worked with a pulitzer prizewinner david zuchino and tim flannery who wrote one of the early sort of treatises on weather change, when you work of writers of that caliber and asking them to make significant changes to their text, they want to feel they're in the hands of somebody who knows what they're doing but also is committed to their text as well. and i hope that i conveyed some of that passion and enthusiasm in my own book. tavis: does that mean that you were editable? >> yeah, yeah, i'm maleable, open to suggestions and such.
tavis: in your own right. >> you have to be because it's really a dialogue. i think the thing people forget about publishing, even though my name is on a jacket, there are tons of people, my editor amber kerachi, jacket designers, it's really a collaborative process. tavis: tell me about "the madonnas of echo park." it's a fascinating story line because it is a novel but to my read looks like short stories. >> yeah, i can see how one would come to that conclusion. the idea is that there is an incident in which a young girl named aurora es per aunsa -- esperanza on the corner with her mother re-enacting a madonna video and borders from 1985. and there is an incident that happens while they're enacting that video and there's a drive by shooting and a young girl is murdered and aurora and felicia have to deal with the consequences of that particular incident and what you get are the stories of the community
dealing with this incident and you get aurora's estranged father who is a day labor who decides if he can turn in somebody that he knows is a murderer, you get a woman who is, you know, sort of cruising the streets of sun set boulevard who thinks she's communioning with the virgin mary and you get these people whose lives have been impacted by this one particular incident. so unlike a collection of short stories where you get a different set of characters and situations, each one of these chapters affects what happens in the next chapter and the characters intersect each other like the movie "crash" in a way. tavis: because you're a citizen of the world and a citizen formerly of echo park having to navigate these issues of people of color, whether they be native american or mexican american or black american, you have lived this story, what it means to be a person of color, how much, i don't want to say cheating, how much -- how much
social commentary -- >> is there in the book? tavis: that you want us to -- i've got through it nd i know you're not proselytizing. >> there are pieces here and there that poke through. i think if you preach to people, if you're didactic in the book it's death because people don't want to be preached to. tavis: especially a novel. >> you're asking them to pay $23, they want to be entertained. so my primary going is -- goal is to entertain and write entertaining stories and fiction. i write about the things that are interesting to me and those things have always been race, class, ethnicity, all those things come into effect in los angeles and want them to shine through and write about them that are engaging and unique in me but in a way i haven't seen addressed in literary fiction before. so if i've accomplished that, i've done my job. but those things are always going to be issues i'm interested in because this is where i grew up. if you're a citizen of los angeles in particular, you have to be interested in those issues. you have to be aware of those
issues. tavis: exactly. how do you keep your feet on the ground literally and figuratively when you have all this type swirling around your very first novel? >> it helps i worked in the business for 10 years. so you know, i've seen this sort of mechanism happen before with other writers and i've seen sort of the pitfalls some people fall into and you know, i think it's helpful to have a very good sense of humor not only about yourself but about your work as well. so you know, i'm just happy and grateful to be here talking about my book and finding an opportunity to discuss it because especially, you know, having worked in the business for so long i was doing all of my writing on the side at night. so you know, the fact i would even have an opportunity to talk to you or talk to people about my writing, i've got more than i could ever hope for. so anything from this point on is gravy. tavis: how long before make don ar calls -- before madonna calls before she hears about it? >> if she's watching -- watching and somebody has her number. tavis: if she hears you have a
story, pushing on borderline. the new book from brando skyhorse, got to love the name and the book. his name, brando skyhorse, the book "the madonnas of echo park." a novel. everybody talking about it. and i'm sure you will be, too, once you get your hands on it this summer for your summer reading. congratulations in advance. good to have you on the program. >> a privilege to be here. tavis: that's our show for tonight. thank you for tuning in. until next time, keep the faith. >> for more information on today's show, visit email@example.com. tavis: join me next time with kitchen confidential chef and author anthony bourdain and singer kelis, next time. you then. >> all i know is his name is james and he needs extra help with his reading. >> i'm james. >> yes.
>> to everyone making a difference. >> thank you. >> you help us all live better. >> nationwide insurance proudly supports tavis smiley. tavis and nationwide insurance, working to improve financial teracy and the economic empowerment that comes with it. >> ♪ nationwide is on your side ♪ >> and by contributions to your pbs station from viewers like you. thank you. captioned by the national captioning institute --www.ncicap.org--